U.K. Finance Minister Osborne to Launch Wide Review of Banks

Britain will announce a broader-than-expected review into the banking industry on Monday, looking at culture and standards as well as the causes of an interest rate-fixing scandal, a source familiar with the situation said.

Britain will announce a
broader-than-expected review into the banking industry on
Monday, looking at culture and standards as well as the causes
of an interest rate-fixing scandal, a source familiar with the
situation said.

The government has come under increasing pressure to take a
closer look at the sector which has felt the full force of
public anger since taxpayers bailed out several banks during the
2008-9 financial crisis.

That pressure intensified last week after Barclays
was fined for attempting to manipulate the London Interbank
Offered Rate (Libor), used worldwide as a benchmark for prices
on about $350 trillion of derivatives and other financial
products.

The opposition Labour Party has threatened to trigger a vote
in parliament on whether there should be a full-blown, judge-led
inquiry into the banking sector's excesses, culture and
blunders.

The UK source said the investigation, to be unveiled by
finance minister George Osborne at around 1530 GMT, would be
"wider than a narrow review into Libor and criminal sanctions
... (and) will encompass culture and sanctions."

However, it is unclear whether the government has any
appetite for a wholesale inquiry into the banking sector, as it
could make its own planned overhaul of the industry's current
regulatory regime look inadequate.

While it is politically expedient to 'bash the bankers', the
Conservative-led government will also be wary of wildly
attacking a crucial sector in Britain's economy which is still
struggling to function properly after the credit crunch.

Labour leader Ed Miliband has called on Barclays Chief
Executive Bob Diamond to resign after the bank's involvement in
the interest rate-fixing scandal.

That case is expected to be just the tip of the iceberg,
with several other banks under scrutiny for trying to manipulate
Libor.

Barclays Chairman Marcus Agius fell on his sword in an
effort to stem the scandal, but critics say that is not enough
and that the whole industry needs to change.

"I want to see a new code of conduct for bankers, there is
no proper professional code for bankers. For all we know, some
of the people who were part of this scandal might still be
working in other banks," Miliband told ITV on Monday.

"There also needs to be that full inquiry, that full public
inquiry into exactly what has happened throughout our banking
industry."